Goldman Sachs have released a bearish assessment of the domestic economy and interpretation of the RBA's statement yesterday

Goldman Sachs have released a bearish assessment of the domestic economy and interpretation of the RBA's statement yesterday. This from a note to clients: The bottom line is that weather anomalies have temporarily distorted the data, underlying inflation is around the mid-point of the RBA's target band, inflation expectations are near a 20-year low, domestic demand remains tepid, employment is contracting, and the biggest challenge of Australia's long expansion - the normalization of the commodity prices and investment booms - lies ahead in 2014 and 2015. Goldman anticipates another rate cut in the current easing cycle. The Bank says catalysts are declining mining investment, declining commodity prices, disappointing acceleration in non-mining activity, and the announcement of the first phase of the new government's fiscal consolidation plans. These views are despite the RBA suggesting a period of stable rates that most interpret as he bottom of the rates cycle. (VIEW LINK)